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LyondellBasell Industries N.V. LYB recorded a loss of $890 million or $2.77 per share. This compares unfavorably with a profit of $573 million or $1.75 per share reported a year ago.
Barring one-time items, LYB posted adjusted earnings of $1.01 per share, down from the year-ago quarter's figure of $1.91. It topped the Zacks Consensus Estimate of 80 cents.
The company’s net sales in the reported quarter were $7,727 million, which beat the Zacks Consensus Estimate of $7,493.9 million. Net sales fell around 10% from $8,604 million in the prior-year quarter.
LYB saw improved profitability in the Olefins & Polyolefins — Americas segment, backed by higher olefins margins and increased sales volumes. Sales volumes were supported by higher domestic demand for polyethylene.
LyondellBasell Industries N.V. price-consensus-eps-surprise-chart | LyondellBasell Industries N.V. Quote
In the reported quarter, the Olefins & Polyolefins — Americas segment's revenues declined around 13% year over year to $2,606 million. The figure beat the consensus estimate of $2,531 million.
Similarly, Olefins & Polyolefins — Europe, Asia, the international segment revenues declined 8% year over year to $2,587 million. It topped the consensus estimate of $2,293 million.
In the Intermediates and Derivatives segment sales were $2,343 million, a decline of roughly 13% year over year, beating the consensus estimate of $2,325 million.
The Advanced Polymer Solutions revenues were $870 million, representing a decline of around 3% year over year, missing the consensus estimate of $891 million.
The Technology segment's revenues were $115 million, marking a decline of roughly 21%, and lagging the consensus estimate of $137 million.
LYB generated $983 million in cash from its operating activities in the reported quarter. The company continued its balanced capital allocation strategy by spending $406 million on capital expenditures and distributing $443 million to shareholders via dividends and share buybacks. At the end of the quarter, LYB had $1.8 billion in cash and cash equivalents, along with $6.5 billion in total available liquidity.
In the fourth quarter, LyondellBasell anticipates reduced operating rates and year-end seasonality to impact results across most of its businesses. Increased natural gas and feedstock costs are expected to put pressure on integrated polyolefins margins in North America. LYB also sees soft industrial and consumer demand to persist in Europe. While Industry downtime aided oxyfuels margins during October, seasonally higher costs for feedstocks and reduced octane values are expected to pressure margins for the balance of the fourth quarter. Cost reduction initiatives are also forecast to offset some of the pricing pressures in Advanced Polymer Solutions.
LYB remains on track with its Cash Improvement Plan, which is expected to deliver on a $600 million target for 2025 and at least $1.1 billion by the end of next year.
Shares of LyondellBasell have lost 47.8% in the past year compared with the Zacks Chemicals Diversified industry’s 27.4% decline.
LYB currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks worth a look in the basic materials space are Avino Silver & Gold Mines Ltd. ASM, Royal Gold, Inc. RGLD and and Fortuna Mining Corp. FSM.
Avino Silver is slated to report third-quarter results on Nov. 6. The Zacks Consensus Estimate for third-quarter earnings is pegged at 3 cents per share. ASM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 141.7%. Avino Silver carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Royal Gold is scheduled to report third-quarter results on Nov. 5. The Zacks Consensus Estimate for RGLD’s third-quarter earnings is pegged at $2.30 per share. RGLD’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average surprise being 8.9%. Royal Gold currently sports a Zacks Rank #1.
Fortuna Mining is scheduled to report third-quarter results on Nov. 5. FSM carries a Zacks Rank #2 at present. Fortuna Mining’s earnings beat the consensus estimate in one of the last four quarters and missed thrice.
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This article originally published on Zacks Investment Research (zacks.com).
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